Effective Audit Committees

Equip yourself with the fundamentals needed for the Audit Committee

Audit Committees are expected to play a vital role in governance and in building trust in corporate reporting. Audit Committees therefore need members who have appropriate levels of expertise and knowledge of the industry and of the company.
This course will explore the fundamentals of the role of the Audit Committee and the nature and essential qualities of its members, particularly the Audit Committee Chairman. The course will cover the relationships with all key stakeholders and will examine all the key information flows and decision processes.

The course will be led by a governance and audit expert who has been involved with attending and presenting at Audit Committees for over 25 years. The course will equip participants with an understanding of the appropriate levels of knowledge and expertise and an awareness of the mechanisms and priorities for audit committees in today’s complex and highly regulated financial services world.

By attending this strategic four day course you will be able to:

• Understand the role and responsibilities of the Audit Committee and its relationship with the Board and the Board Risk Committee
• Consider what prudent and effective controls sit around the Audit Committee meeting process
• Understand the critical relationships with key stakeholders such as external audit, internal audit, the finance team and the company secretariat
• Understand the relationships with the various regulators and the complexities of group structures and overseas jurisdictions
• Recognise common areas that can cause problems
• Take away key actions and ideas to improve on Audit Committee performance

This course has been designed specifically for Audit Committee members and those directly involved in supporting and preparing information for Audit Committees.

This course will broaden the awareness of members of and advisers to Audit Committees and provide appropriate levels of oversight of financial reporting, audit quality, and other risks on the committee’s agenda.

It provides an opportunity for participants to update their knowledge and to explore the available mechanisms to deliver the effective Audit Committee support necessary in order to fulfil their roles.

This advanced four day course is a vital overview to the Audit Committee support practices and mechanisms that exist in listed companies, banks and other financial institutions. Practical guidance will be provided on such issues as:

• Being an Audit Committee member
• Best practice guidance on policies and procedures
• Governance, risk and compliance frameworks
• The relationship with the Board Risk Committee
• The relationship with External Audit, Internal Audit and Finance
• How to challenge Executive Directors, external Auditors and Chief Internal Auditors on their reports
• Dealing with regulators and other stakeholders
• Managing information flows
• Measuring the effectiveness of your Audit Committee

PLUS: The course will contain a variety of training activities that include:

• Practical presentations and lectures
• Group discussions
• Multiple case studies
• Audit Committee role plays

Agenda

Day 1

Module 1

1. The Role and Responsibilities of Audit Committee Members

• The role of the Audit Committee as delegated by the board
• Committee Terms of Reference
• Typical structure and membership
• The role of the Chairperson
• The roles of the key advisors, including the Company Secretary
• Guidance Available to Audit Committees

Includes the case study: Review a typical Audit Committee terms of reference and provide feedback on examples of delegates’ own committees’ terms of reference

Module 2

1. Audit Committee Essentials

• Oversight of financial reporting and external/internal audit
• Understanding the organisation, its culture, strategy and operations
• Demonstrating sound industry knowledge
• Relationships with board members, senior management, internal and external auditors
• Understanding the impact of current and emerging issues (e.g. cyber security, disruption, culture and pandemic risks)
• Governance and interaction with the Risk Committee
• Assessing the range of management information provided to the Audit Committee

Includes the case study: Looking at the essential qualities of an Audit Committee member

Module 3

1. Key Stakeholder Relationships - Finance

• How to provide effective oversight and challenge to the annual report and accounts
• Regular board and committee finance reporting
• Assessing the new strategic report and the viability statement
• Dealing with the requirement for the annual report to be 'fair, balanced and understandable'
• Understanding the Committee’s role in reviewing regulatory returns

Includes the case study: Reviewing and understanding the challenges of typical finance reports to the Committee, as well as the published report and accounts   Day 2

Module 4

1. Key Stakeholder Relationships – External Audit

• Roles and responsibilities for external auditors in relation to audit committees
• Added value from the external auditor relationship
• Assessing external auditor effectiveness
• Governance requirements and the guidance from the Financial Reporting Council (FRC) and other relevant regulatory and professional bodies
• Retendering the external audit role and evaluating external audit pitches

Includes the case study: Best practices in reviewing the effectiveness of external audit

Module 5

1. Key Stakeholder Relationships – Internal Audit

• Roles and responsibilities for internal auditors in relation to audit committees
• Understanding the risk-based internal audit planning process (and challenging the plan)
• Internal Audit reports, ratings, gradings and links to the Board Risk Committee
• Review the internal audit guidance from the Basel Committee on Banking Supervision
• Evaluating internal audit effectiveness
• Assessing the use of Key Performance Indicators and Balanced Scorecards
• Includes the Case Study: Reviewing a typical internal audit report to an audit committee

Module 6

1. Audit Committee Activities

• The key role of the Audit Committee Chair
• Setting the agenda and planning the work of the committee
• Private meetings plus informal meetings outside committee
• Structure, preparation and review of audit committee papers
• Importance of minutes, actions and follow-up

Includes the Case Study: Reviewing the structure and content of a model audit committee pack

Day 3

Module 7

7.1 Audit Committee Report

• Guidance on what must be included in the published Audit Committee Report
• Members, qualifications, and meetings held
• Significant issues considered in relation to the financial statements
• How they assessed the external auditors’ appointment and effectiveness
• External audit fees and non-audit services
• Internal audit risk-based planning, reporting and assessment

Includes the review of examples of delegates’ published audit committee reports

7.2 Annual Reviews of External and Internal Audit Effectiveness

• Guidance for self-assessment
• External reviews of internal audit (per global IIA Standards)
• Typical areas of concern

7.3 Annual Review of Audit Committee effectiveness

• Pros and cons of self-assessment
• Independent board and committee reviews
• Typical areas of concern

Includes the Case study: Examples from independent effectiveness reviews

Module 8

8.1 Other Audit Committee Challenges

Depending on time and delegates’ priorities (including feedback from Day 1), we will use a range of video and case study material to support group and break-out discussions to reflect the current and emerging challenges facing most Audit Committees. These typically include:

• Financial reporting fraud
• Whistleblowing
• Cybersecurity
• Major change programmes
• Complex transactions

Module 9

9.1 Course summary and close

• Review course objectives
• Summary of main areas covered throughout the programme
• Next steps
• Course Evaluation by participants
• Issue of certificates and close